Good entry is the first pass to improve the quality of listed companies, and it is also the basis and prerequisite for A shares to be able to operate vigorously and healthily. Bian Yongzu, deputy director of Industry Department of Chongyang Institute of Finance, Renmin University of China, said in an interview with Securities Daily.
IPO censorship is very strict
A spokesman for the China Securities Regulatory Commission (CSRC) said recently that the CSRC had launched the first batch of on-site inspections of 44 enterprises under examination in 2019. Among them, the CSRC had completed on-site inspections of 24 enterprises applying for the main board, small and medium-sized boards and GEM startups. At present, nine enterprises have applied for withdrawal of their declaration materials.
In response, Ge Shoujing, a senior researcher in macro strategy at the Institute of Finance, told the Journal of Securities on September 10 that the significance of strict entrance by regulators for A-share market lies in: first, eliminating those companies that rely on fraudulent listing, protecting the interests of investors and helping to boost market confidence. Second, it can alleviate the current queuing situation of IPO and make the capital market more efficient. Thirdly, it avoids the phenomenon of bad currency expelling good currency and helps to establish a standardized, transparent, open, dynamic and resilient capital market.
It is noteworthy that the CSRC will continue to arrange the second batch of on-site inspections of the enterprises under examination in 2019 in accordance with the combination of problem-oriented and spot checks and lots, and maintain a strict supervision of information disclosure violations.
On-site inspection will mainly focus on the areas where there are many problems exposed recently, such as legal flaws such as equity, the authenticity of financial information, the objectivity of business operation ability and sustained profitability, and the development prospects of the industry. Bian Yongzu said that on-site inspection will also review the problems of inadequate due diligence and lax checks of intermediaries, so as to avoid the listing of enterprises with illness.
Audit rhythm slows down and the meeting rate rises
Securities Daily reporter noted that since the second half of the year, the pace of IPO auditing has tended to be flat, but the passing rate has increased. According to iFinD data from Tonghuashun, up to September, the CSRCs Audit Committee has audited five Shanghai companies, with a passing rate of 100%. In August, the China Securities Regulatory Commission (CSRC) examined nine ShangHai enterprises, of which eight passed and one was rejected, with a passing rate of 88.89%. In July, the DARC audited 11 Shanghui enterprises, 7 of which passed, with a passing rate of 63.64%.
In Bian Yongzus view, the slowdown in the pace of IPO auditing releases that regulatory authorities are speeding up capital market reform and improving the quality of incremental listed companies.
Bian Yongzu believes that the follow-up regulatory authorities will also adhere to the high requirements of listing standards, eliminate the fluke mentality of some planned listed companies, and build a healthy investment and financing and listing culture. In the medium and long term, in order to support the real economy and make more companies get financing conveniently and quickly, reducing the financing cost will also become a major trend. With the maturity of intermediaries and investors, the market-oriented issuance mechanism is initially effective, so the IPO overtaking rate may increase in the future.
Source: Liable Editor of Securities Daily: Yang Qian_NF4425